Reckless homicide conviction does not bar insurance coverage for an "accident," Supreme Court holds

​Note: We are crunching Supreme Court of Wisconsin decisions down to size. The rule for this is that no justice gets more than 10 paragraphs as written in the actual decision. The "upshot" and "background" sections do not count as part of the 10 paragraphs because of their summary and very necessary nature. We've also removed citations from the opinion for ease of reading, but have linked to important cases cited or information about them. ​Italics indicate WJI insertions except for case names, which also are italicized. Underlined text indicates emphasis added by the justices, not WJI.

The case: Lindsey Dostal v. Curtis Strand and State Farm Fire and Casualty Company
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Majority Opinion: Justice Ann Walsh Bradley (26 pages), joined by Justices Rebecca F. Dallet, Brian Hagedorn, and Jill J. Karofsky.

Dissent: Justice Annette K. Ziegler (16 pages), joined by Justices Rebecca Grassl Bradley and Patience Drake Roggensack.

The upshot

The court of appeals determined that Curtis Strand's conduct did not constitute an "occurrence" covered by the State Farm policy at issue because his conviction for second-degree reckless homicide established that the death was not the result of an accident.

Dostal contends that Strand's criminal conviction does not preclude a finding that Haeven's death was the result of an accident. She further advances that the State Farm policy provides coverage for her claims against Strand and that neither the resident relative nor the intentional acts exclusion bars coverage.

In contrast, State Farm asserts that issue preclusion bars relitigation of the issue of whether Haeven's death was the result of an accident. It argues that Strand's criminal conviction is dispositive on the issue of available insurance coverage under Strand's policy, and that there is no coverage for Dostal's claims. State Farm further contends that the policy's resident relative and intentional acts exclusions preclude coverage.

We conclude that issue preclusion does not bar Dostal from seeking insurance coverage for her claims against Strand. The issue of whether Strand's conduct constituted an "accident" was not actually litigated in the prior criminal proceeding. Additionally, we conclude that there are genuine issues of material fact regarding the application of the resident relative and intentional acts exclusions such that summary judgment is inappropriate.

Accordingly, we reverse the decision of the court of appeals and remand to the circuit court for further proceedings consistent with this opinion.

Background

Dostal and Strand were in an on-and-off relationship for 17 years. Dostal gave birth to Haeven on April 3, 2017, and Strand was subsequently adjudicated the father. 

On July 11, 2017, Haeven passed away as a result of head trauma that occurred while she was in Strand's care. Law enforcement conducted an investigation into Haeven's death. 

As part of the investigation, law enforcement spoke with Strand multiple times, during which Strand gave inconsistent accounts of what happened. In a statement given to police on July 10, 2017, Strand said that Haeven fell off of his knee and hit the floor as he attempted to burp her. Strand was interviewed again in November of 2017, at which time he stated that he was warming a bottle, turned around and hit the kitchen island, dropping Haeven to the floor. In both versions of events, Strand put Haeven to bed without seeking medical attention. 

…. After a jury trial, at which Dostal was a witness, the jury convicted Strand of second-degree reckless homicide and resisting or obstructing an officer.

Dostal subsequently brought this civil action for negligence and wrongful death against Strand. …

Strand turned to State Farm, which held his homeowner’s insurance policy. State Farm intervened in the case to argue that Strand was not covered.

…. Specifically, State Farm asserted that there was no "occurrence" (defined as an "accident") triggering coverage. In State Farm's view, the fact that Strand was convicted of second-degree reckless homicide, which required that the jury find that Strand created an unreasonable and substantial risk of death or great bodily harm and that he was aware of that risk, precluded the events at issue "from being labeled a mere 'accident.' " State Farm additionally argued that even if there were an "occurrence," coverage remains precluded under a "resident relative" exclusion and an "intentional acts" exclusion. 

The circuit court and court of appeals found in favor of State Farm.

The guts

The insurance policy in this case sets forth that coverage is provided for an "occurrence." An "occurrence," in turn, is defined under the policy as an "accident," which results in, as relevant here, "bodily injury." The policy does not include a definition for "accident." In interpreting this term, we keep in mind that we read insurance policies from the perspective of a reasonable person in the position of the insured. We have previously described an "accident" as an event "occurring by chance or arising from unknown or remote causes" and "an event which takes place without one's foresight or expectation." 

State Farm contends that the issue of Strand's fault was actually litigated in a prior action, namely the criminal case against Strand. It asserts that the jury's verdict convicting Strand of second-degree reckless homicide conclusively determined that, because Strand's conduct was reckless, Haeven's death could not have been an "accident" for purposes of insurance coverage.

The offense of second-degree reckless homicide is set forth as follows: "Whoever recklessly causes the death of another human being is guilty of a Class D felony." In turn, the statutes define criminal recklessness, as relevant here, to mean "that the actor creates an unreasonable and substantial risk of death or great bodily harm to another human being and the actor is aware of that risk." 

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We are asked to discern whether being aware of the risk that something might happen necessarily means that when that thing happens, it is not an "accident." Dostal asserts that this question should be answered in the negative. She contends that none of the elements of second-degree reckless homicide that the jury found would preclude a determination that Haeven's death was an accident. 

State Farm, on the other hand, advances that in this analysis we should focus on the conduct itself and not the result of the conduct in determining whether conduct was an accident. In other words, State Farm points the court's attention to the "injury-causing event" and not the injury. Under this theory, even if Haeven's death was unintentional, Strand's conduct that led to the death was still not accidental because he was aware of the risk of death, and that is where our focus should be for purposes of coverage.

Wisconsin does not have defining case law, Walsh Bradley wrote. She cited two out-of-state cases, one from New York and the other from Illinois, as illustrative examples holding that reckless conduct does not necessarily eliminate the possibility of a resulting accident.

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…. State Farm provides us with no authority compelling the conclusion that a reckless act can never be an "accident," and the analysis of the … (two out-of-state cases) persuasively concludes that the opposite is true. 

Thus, in the context of this case, the issue of whether Strand's conduct was an "accident" was not actually litigated in the prior criminal proceeding. The jury here was presented with a question of guilty or not guilty and did not make a determination of what events actually occurred. It was not asked to return a special verdict and made no specific factual findings aside from finding that the elements of the crime charged were proven beyond a reasonable doubt. Strand gave inconsistent accounts of the events leading to Haeven's death. We do not know if the jury accepted either of his explanations, or if it rejected both.

Likewise, if the jury rejected both of Strand's explanations, we do not know what alternative explanation it embraced. The jury additionally heard testimony from the State's expert that although a fall can result in a skull fracture as occurred in this case, "we also know from the literature from short falls . . . that children do not typically, or the vast majority do not incur any kind of brain injury from a short fall." Another expert testified: "I don't think hitting the counter and falling from that height would have resulted in those injuries." 

Further, we do not know what act committed by Strand (if it accepted either of his explanations) was determined by the jury to be reckless. The jury heard testimony both that Strand dropped Haeven (whether it was from his knee while trying to burp her or when he turned and hit the kitchen island) and that he put her to bed without seeking medical attention. It could have concluded that the first act (dropping Haeven, however it happened) was an accident, but that it was reckless for Strand to put her directly to bed without first seeking medical care. In such a scenario, there would be an "accident" covered by the State Farm policy.

Haeven’s “residency” with Strand also was in dispute in the case. State Farm’s contention that a coverage exemption existing for acts committed by people residing together thus was not suitable for summary judgment, Walsh Bradley said. Also not appropriate for summary judgment was State Farm’s argument that Strand’s act was intentional, and so not covered, Walsh Bradley said.

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Dissent

I dissent because 12 jurors at Strand's criminal trial unanimously decided beyond a reasonable doubt that Haeven's death was not an "accident," and this precludes relitigating the issue of Strand's coverage. Because the jury's verdict is controlling in this case and cannot be relitigated, that ends the analysis as to Strand – he has no coverage under his policy with State Farm, which grants coverage for bodily injury caused by an "accident." Since Strand has no claim against State Farm, as his causing Haeven's death was beyond a reasonable doubt not an accident, Dostal is also precluded from making a claim against State Farm under Strand's policy. Dostal has no independent claim against State Farm, and she cannot recover under Strand's policy any more than Strand could.

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…. While she (Dostal) may have a claim against Strand for his criminally reckless killing of Haeven, this is not a risk for which Strand purchased insurance. Strand's insurance contract does not provide Dostal with more coverage than it would provide its own insured. The circuit court and court of appeals therefore correctly concluded that State Farm was entitled to summary judgment and declaratory judgment on the issue of coverage.

The majority contorts its analysis in order to reach a result of coverage in this very sad and unfortunate case. It ignores the facts of this case and the law of our state, instead reaching out to foreign authorities to create insurance that was never provided by contract. As we have interpreted the term "accident" in insurance contracts, Strand's act of "criminal recklessness" cannot be an "accident" under his insurance policy with State Farm because Strand was "aware" that he created an "unreasonable and substantial" risk of Haeven's death. Strand's prior conviction for second-degree reckless homicide therefore precludes him from asserting that Haeven's death was an "accident" for which he is granted coverage. The majority mistakenly frames the issue as whether issue preclusion binds Dostal when the issue is actually whether it binds Strand. Because Strand has no claim against State Farm and cannot relitigate that issue, Dostal has no claim either. 

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…. In cases under the direct action statute, the plaintiff "steps into the shoes of the tortfeasor and can assert any right of the tortfeasor against the insurer." …In other words, a plaintiff bringing a direct action cannot recover against a tortfeasor's insurer unless the tortfeasor would himself be able to recover.

…. Therefore, the question in this case is not whether Dostal is precluded from claiming there was an accident. The question is whether Strand is precluded from doing so. Because issue preclusion applies against Strand, Strand has no coverage for Dostal to claim. 

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However, the majority's analysis of our state law stops there. Notably absent from the majority's analysis is any recognition of the fact that we have previously interpreted the terms "occurrence" and "accident" as used in insurance policies. We have said that an "accident" is "an event which takes place without one's foresight or expectation. …

The jury in Strand's criminal trial unanimously concluded, beyond a reasonable doubt, that Strand was aware that his actions created an unreasonable and substantial risk to Haeven. The jury concluded beyond a reasonable doubt that Strand was "aware of that risk." If the risk of Haeven's death were unexpected or unforeseen to Strand, such a finding would not be possible. …

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Furthermore, the majority's reliance on foreign authorities treats this issue as if it were settled. That is not the case. Several courts in other jurisdictions have come out on the opposite side, concluding that reckless conduct is not accidental. 

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…. Because Strand has no coverage under State Farm's policy, Dostal cannot recover against State Farm either.

The majority avoids this inevitable conclusion by ignoring the law of our state and blindly relying on foreign authorities. It makes no effort to scrutinize the cases it cites and summarily labels them "persuasive." As a result, the majority interprets Strand's homeowner's insurance policy as providing "Reckless Homicide Insurance," indemnifying policyholders for their decisions to disregard known "unreasonable and substantial risk[s] of death or great bodily harm." This is absurd. 

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